trade war stocks

While the Federal Reserve paused its three-year hiking campaign this year, officials have fallen short of signalling that lower borrowing costs are coming.
But as the trade war between the US and China escalates, market expectations for an interest rate cut have been ticking higher.
More than three quarters of investors forecast a rate cut by the end of the year, according to CME Group’s FedWatch tool.

An increasing number of market watchers appear to think the escalating trade war between Washington and Beijing poses risks that could upend growth in the largest economy.

While the Federal Reserve backed paused its three-year hiking campaign this year, officials have fallen short of signalling that lower borrowing costs are coming.

Yet with underlying signs of slowing, some have seen hopes for lower borrowing costs grow. The recent escalation in the US-China trade war has only bolstered expectations, particularly in financial markets.

“The econ data does not support a rate cut, but worsening market conditions could push that direction if they continue to deteriorate,” said Luke Tiley, the chief economist at Wilmington Trust and a former Philadelphia Fed staffer.

More than three quarters of investors forecast a rate cut by the end of the year, according …read more


Source:: Businessinsider – Politics

      

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